New mortgage lending of $7.9b in Dec down just 13% from Nov and near 2021 average despite talk of hard CCCFA crunch; First home loans down just 10%, but landlord share back above first homers again
HI Bernard. My guess would be that many of the loans advanced by the banks in December might have been approved in November, and might not therefore have been impacted by the CCCFA changes. We may have to wait a bit longer to get a true measure of the facts (if any!). Another point is that we don't see large numbers of complaints from people who obtained loans.
Spot on David Tripe. From an 'on the ground view', LVR changes kicked in for new loans being assessed from 1 November. Based on an average pipeline of 8 weeks from loan application, the LVR changes will impact in January RBNZ data.
Banks started assessing against the new CCCFA regs from mid-November on average (each bank had it's own implementation date during November. So assuming an average 8 week pipeline from application, this will see some impact in January RBNZ data, three quarters impact in February, and a full impact in March. The March data will be published by the RBNZ near the end of April.
The only precursor data we have is from Centrix, which shows approved home loan applications dropped significantly in December compared to the usual run rate.
So what I'm really saying is that the chickens have not come home to roost in the RBNZ data off the back of the LVR and CCCFA changes. Watch this space.
It makes sense that happiness levels off as income increases and the relationship to the poverty line is a compelling reason why. However, I'd suggest that with the increased costs of living and generally flat wages, the poverty line is shifting upward and incomes need to increase commensurately.
The OECD is right about house prices. The Labour Government knows that what is needed is an annual tax on land to curb enthusiasm for property investment. Instead, when Covid struck it set the money-printing presses rolling and showered banks with billions to lend to inflate house prices, instead of distributing the largesse to everyone as helicopter welfare. Now it must reverse that process, and that will be painful.
On superannuation the OECD is dead wrong.
NZ Superannuation will continue to be affordable without raising the retirement age as long as (a) New Zealanders are taxed appropriately on both income and wealth, and (b) NZ Superannuation, which is a welfare benefit, goes to those who need it.
Susan St John has proposed an elegant means of sorting the sheep from the goats by having those who sign up for NZ Super on an alternative tax regime that would discourage those over-65s with significant other income from applying:
(According to Modern Monetary Theory we could go further: as NZ Super is an internal cost paid in New Zealand dollars, the Government could set the printing presses rolling, as it did so generously for property owners last year, and extend NZ Super to every adult as a universal basic income. All that would be needed in exchange would be to have a significant tax on wealth to withdraw excess money from circulation to subdue inflation.)
I often discuss with people that I would like my superannuation right now, as I can enjoy it more in the time where I am physically able and capable of doing just about everything, whilst not being a burden later in life, and to ensure I can set myself up to not require superannuation later in life (all going well). I see it as an advance payment on what I am entitled too (give or take a set number of years that is fair and reasonable). If I don't make it to 65 then I've more than paid my dues in my opinion.
As it has forever the printing press operates when the fortnight’s super is paid. And a citizen UBI could be paid in exactly the same way. It is not taxation that pays for super or a UBI Taxation can then be used to take surplus money out of the system to prevent the rich hoarding their money.
“Rich hoarding their money.” So if it is their money shouldn’t they be able to do with it as they desire? Hoarding suggests saving. I’d argue a lot of middle class NZers could improve their situation by saving (oops, “hoarding”) rather than buying frivolous junk.
an economy that benefits everybody not just a few. You see, saying that it is just ‘saving’ isn’t really true. If that is said then you must say that the poor are only poor because they didn’t save. When wages are low and rent, food, petrol and electricity are so expensive how can anyone save? Years ago things were different; there were death duties so that the rich couldn’t just give their children large amounts of money when they died; there was annual cost of living adjustment of wages, people with children paid less tax than those who didn’t have children, mothers got a weekly benefit for each child to help with their upbringing up to the age of 16 and that could be capitalised to put towards a deposit on a family home; rents were controlled. The only thing that remains from those times is universal superannuation and that is adjusted annually for wages and inflation. Very few countries have the type of universal superannuation we have here. Now that was how an economy benefited the poor as well. There were rich people in those days but the aim was to have an more equal society. Many people came from England and didn’t want New Zealand to be like England which was a very divided country. It doesn’t make it right or wrong. It just example of how it was done.
The universal child allowance paid prior to 1990 was a strength of NZ’ welfare system, a far more straightforward system than working for families where if someone does extra work for extra money their WWF gets cut.
During the war house building was adapted to include locally available concrete which was surfaced and flat roof wooden houses asphalt roofed and often black stained to continue building the a NZ iconic classics and still stand today. Why aren’t we developing these en made now? Affordably? And direct funding via state advances. Investing in local manufacturing and supplies and get on with it. We don’t need imports, banks or these rules to get things done. We also have the capacity for earth pressed homes and hempcrete we can grow here at scale and profit.
I noted that Christopher Luxon has endorsed the OECD report recommending increasing age of eligibility for super, as to the likely political impact of this policy Christopher need look no further than David Cunliffe’s catastrophic election defeat 27 September 2014.
While National appears to have difficulty understanding the downside of this policy it is fairly straightforward, the NZ employment market is characterized by rampant ageism, if made redundant over 50 the working assumption of the HR hirers is that all persons over 50 have been compelled to have a full frontal lobotomy at 50 year of age and are useless.
Given the ageist employment market NZ has referring to life expectancy is an irrelevance, when National can come up with policies to address ageism then it can justify raising the age of eligiblity. Otherwise it is just condemning thousands of older redundant workers to years of subsistence living on the dole.
HI Bernard. My guess would be that many of the loans advanced by the banks in December might have been approved in November, and might not therefore have been impacted by the CCCFA changes. We may have to wait a bit longer to get a true measure of the facts (if any!). Another point is that we don't see large numbers of complaints from people who obtained loans.
Good points. Will keep a close eye on things.
Spot on David Tripe. From an 'on the ground view', LVR changes kicked in for new loans being assessed from 1 November. Based on an average pipeline of 8 weeks from loan application, the LVR changes will impact in January RBNZ data.
Banks started assessing against the new CCCFA regs from mid-November on average (each bank had it's own implementation date during November. So assuming an average 8 week pipeline from application, this will see some impact in January RBNZ data, three quarters impact in February, and a full impact in March. The March data will be published by the RBNZ near the end of April.
The only precursor data we have is from Centrix, which shows approved home loan applications dropped significantly in December compared to the usual run rate.
So what I'm really saying is that the chickens have not come home to roost in the RBNZ data off the back of the LVR and CCCFA changes. Watch this space.
It makes sense that happiness levels off as income increases and the relationship to the poverty line is a compelling reason why. However, I'd suggest that with the increased costs of living and generally flat wages, the poverty line is shifting upward and incomes need to increase commensurately.
Yes. Disposable income and the essentials costs of living really matter around that threshold.
The OECD is right about house prices. The Labour Government knows that what is needed is an annual tax on land to curb enthusiasm for property investment. Instead, when Covid struck it set the money-printing presses rolling and showered banks with billions to lend to inflate house prices, instead of distributing the largesse to everyone as helicopter welfare. Now it must reverse that process, and that will be painful.
On superannuation the OECD is dead wrong.
NZ Superannuation will continue to be affordable without raising the retirement age as long as (a) New Zealanders are taxed appropriately on both income and wealth, and (b) NZ Superannuation, which is a welfare benefit, goes to those who need it.
Susan St John has proposed an elegant means of sorting the sheep from the goats by having those who sign up for NZ Super on an alternative tax regime that would discourage those over-65s with significant other income from applying:
https://cdn.auckland.ac.nz/assets/business/about/our-research/research-institutes-and-centres/RPRC/PensionBriefing/Pension-briefing-2021-2-NZS-as-basic-income.pdf
(According to Modern Monetary Theory we could go further: as NZ Super is an internal cost paid in New Zealand dollars, the Government could set the printing presses rolling, as it did so generously for property owners last year, and extend NZ Super to every adult as a universal basic income. All that would be needed in exchange would be to have a significant tax on wealth to withdraw excess money from circulation to subdue inflation.)
Interesting. I’ll have a look. I agree the oecd’s framing is all wrong. We can afford whatever we want with the right tax levels.
I often discuss with people that I would like my superannuation right now, as I can enjoy it more in the time where I am physically able and capable of doing just about everything, whilst not being a burden later in life, and to ensure I can set myself up to not require superannuation later in life (all going well). I see it as an advance payment on what I am entitled too (give or take a set number of years that is fair and reasonable). If I don't make it to 65 then I've more than paid my dues in my opinion.
I think Peter Dunne proposed something similar a few years back, the idea has merit.
As it has forever the printing press operates when the fortnight’s super is paid. And a citizen UBI could be paid in exactly the same way. It is not taxation that pays for super or a UBI Taxation can then be used to take surplus money out of the system to prevent the rich hoarding their money.
“Rich hoarding their money.” So if it is their money shouldn’t they be able to do with it as they desire? Hoarding suggests saving. I’d argue a lot of middle class NZers could improve their situation by saving (oops, “hoarding”) rather than buying frivolous junk.
an economy that benefits everybody not just a few. You see, saying that it is just ‘saving’ isn’t really true. If that is said then you must say that the poor are only poor because they didn’t save. When wages are low and rent, food, petrol and electricity are so expensive how can anyone save? Years ago things were different; there were death duties so that the rich couldn’t just give their children large amounts of money when they died; there was annual cost of living adjustment of wages, people with children paid less tax than those who didn’t have children, mothers got a weekly benefit for each child to help with their upbringing up to the age of 16 and that could be capitalised to put towards a deposit on a family home; rents were controlled. The only thing that remains from those times is universal superannuation and that is adjusted annually for wages and inflation. Very few countries have the type of universal superannuation we have here. Now that was how an economy benefited the poor as well. There were rich people in those days but the aim was to have an more equal society. Many people came from England and didn’t want New Zealand to be like England which was a very divided country. It doesn’t make it right or wrong. It just example of how it was done.
The universal child allowance paid prior to 1990 was a strength of NZ’ welfare system, a far more straightforward system than working for families where if someone does extra work for extra money their WWF gets cut.
During the war house building was adapted to include locally available concrete which was surfaced and flat roof wooden houses asphalt roofed and often black stained to continue building the a NZ iconic classics and still stand today. Why aren’t we developing these en made now? Affordably? And direct funding via state advances. Investing in local manufacturing and supplies and get on with it. We don’t need imports, banks or these rules to get things done. We also have the capacity for earth pressed homes and hempcrete we can grow here at scale and profit.
"at risk" rhetoric of the privileged
https://www.stuff.co.nz/business/127651438/oecd-new-zealand-still-at-risk-of-large-house-price-fall
One swallow does not a summer make - as goes the old English saying.
I noted that Christopher Luxon has endorsed the OECD report recommending increasing age of eligibility for super, as to the likely political impact of this policy Christopher need look no further than David Cunliffe’s catastrophic election defeat 27 September 2014.
While National appears to have difficulty understanding the downside of this policy it is fairly straightforward, the NZ employment market is characterized by rampant ageism, if made redundant over 50 the working assumption of the HR hirers is that all persons over 50 have been compelled to have a full frontal lobotomy at 50 year of age and are useless.
Given the ageist employment market NZ has referring to life expectancy is an irrelevance, when National can come up with policies to address ageism then it can justify raising the age of eligiblity. Otherwise it is just condemning thousands of older redundant workers to years of subsistence living on the dole.